.jpg)
New Issue
Yes
Sent from my iPad
On May 20, 2013, at 3:09 PM, "jonhayes6666" wrote:
> Something I have not come across before.
>
> PC has a home worth $500k. First is $200, Second is SBA loan of $300. So far so good.
>
> SBA also has a lien on corporate inventory, a/r, fixtures etc. Those assets are worth $300k, SBA lien (same debt as on the home) is $300.
>
> Question: If the PC files ch 7, and the trustee - postpetition - sells the corp assets (forget the procedural issues related to that), and pays the SBA, can he now sell the home because the equity is more than the exemption?
>
>
The post was migrated from Yahoo.
Why not file Chapter 7 for the corporation first, wait until the liquidation is complete, then see how much of the SBA lien is left in order to see if debtor's homestead would be sufficient to cover the remaining equity?
Then, if debtor ends up with nonexempt equity after liquidation of the corporation, you could at least preserve the homestead for purposes of Chapter 11 or Chapter 13 liquidation analysis.
>
> Something I have not come across before.
>
> PC has a home worth $500k. First is $200, Second is SBA loan of $300. So far so good.
>
> SBA also has a lien on corporate inventory, a/r, fixtures etc. Those assets are worth $300k, SBA lien (same debt as on the home) is $300.
>
> Question: If the PC files ch 7, and the trustee - postpetition - sells the corp assets (forget the procedural issues related to that), and pays the SBA, can he now sell the home because the equity is more than the exemption?
>
The post was migrated from Yahoo.
Thanks for the replies. The debtor's house is definitely in jeopardy since there are assets to pay that SBA lien. I didn't even think about preserving the lien for the benefit of the estate, i.e., she wouldn't even get her homestead exemption. Thanks to Larry for reminding me of that. Sure doesn't seem right. We may have to think about a chapter 11 liquidation plan or non-bankruptcy solutions. Jon
>
> The way I see it is that your Debtor has 800k in equity and 500k in secured
> debt. 800k - 500k 300k left over for the unsecured class less costs and
> exemptions.
>
> I don't see why cross collateralization would protect the Debtor in some
> way (JHayes rule #1, bk does nothing). I also don't understand why in a
> situation like the one above, you wouldn't do a Chapter 11, even if it is
> just to liquidate assets -- as a worst case scenario. I rather have my
> client get 10% seller's fee than for some trustee to sell him house AND
> collect 10%? no way!
>
> Plus, in an 11, you might be able to save the home if this person makes
> enough $$.
>
> Sincerely,
> Michael Avanesian
>
>
> On Mon, May 20, 2013 at 4:03 PM, Larry Simons wrote:
>
> > **
> >
> >
> > Actually if the IRS has a lien, the Trustee will sell and step into the
> > IRS's position coming before the homestead. *See, In re Bolden, 327 BR
> > 657*
> >
> > ** **
> >
> > *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> > Of *Nicholas Gebelt
> > *Sent:* Monday, May 20, 2013 3:49 PM
> > *To:* cdcbaa@yahoogroups.com
> > *Cc:* Nicholas Gebelt
> > *Subject:* RE: [cdcbaa] New Issue****
> >
> > ** **
> >
> > ****
> >
> > Dear John,****
> >
> > ****
> >
> > I have not come across your scenario either, but I offer the following
> > observation.****
> >
> > ****
> >
> > Suppose the house is worth $500,000, with a first mortgage of $200,000, a
> > second mortgage of $50,000, and an IRS tax lien of $250,000. At first
> > blush it looks like the trustee is out of luck. However, if the trustee
> > gets the forces of Darth Vader oops, I mean the IRS to release the
> > lien, there is suddenly $250,000 worth of equity, and some of it is
> > nonexemptible. How can the trustee get the Dark Lord to release the lien?
> > By promising a much faster payout after the sale than having to wait for
> > the debtor to make payments. And depending on the facts, the remaining
> > unpaid taxes may survive the discharge. ****
> >
> > ****
> >
> > If the trustee sells the corporation's assets to pay off the SBA loan, it
> > is analogous to getting the IRS to release the lien with the promise of a
> > faster payout than waiting for the debtor pay the debt off. The house will
> > still be part of the estate until the case is closed, so the trustee will
> > certainly go after it once the SBA loan is paid off and the SBA lien is
> > released.****
> >
> > ****
> >
> > In sum, if the trustee sells the corporate assets and pays off the SBA
> > loan, the house is in jeopardy.****
> >
> > ****
> >
> > Let us know how things go.****
> >
> > ****
> >
> > Nick****
> >
> > ****
> >
> > ****
> >
> > Nicholas Gebelt, Ph.D., J.D.****
> >
> > Board Certified Bankruptcy Specialist****
> >
> > ****
> >
> > [image: Description: cid:image003.jpg@...]****
> >
> > ****
> >
> > Law Offices of Nicholas Gebelt****
> >
> > 15150 Hornell Street****
> >
> > Whittier, CA 90604****
> >
> > Phone: 562.777.9159****
> >
> > FAX: 562.946.1365****
> >
> > Email: ngebelt@...; ngebelt@...****
> >
> > Web: www.goodbye2debt.com****
> >
> > Blog: www.southerncaliforniabankruptcylawblog.com/****
> >
> > ****
> >
> > *We are a debt relief agency. We help people file for bankruptcy relief
> > under the Bankruptcy Code.*****
> >
> > ****
> >
> > *Confidentiality Note*: This e-mail is intended only for the person or
> > entity to which it is addressed and may contain information that is
> > privileged, confidential, or otherwise protected from disclosure.
> > Dissemination, distribution, or copying of this e-mail or the information
> > herein by anyone other than the intended recipient, or an employee or agent
> > responsible for delivering the message to the intended recipient, is
> > prohibited. If you have received this e-mail in error, please notify us
> > immediately at 562.777.9159 or e-mail info@... and destroy the
> > original message and all copies.****
> >
> > ****
> >
> > *Representation Note*: If you have not signed a contract of
> > representation, the Law Offices of Nicholas Gebelt do not represent you,
> > and this email does not contain any legal advice for you.****
> >
> > ****
> >
> > *IRS Circular 230 Disclosure: *In order to comply with the requirements
> > imposed by the Internal Revenue Service, we inform you that any U.S. tax
> > advice contained in this communication (including any attachments) is not
> > intended to be used, and cannot be used, for the purpose of (i) avoiding
> > penalties under the Internal Revenue code, or (ii) promoting, marketing, or
> > recommending to another party any transaction or matter addressed herein.*
> > ***
> >
> > ****
> >
> > *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> > Of *jonhayes6666
> > *Sent:* Monday, May 20, 2013 3:09 PM
> > *To:* cdcbaa@yahoogroups.com
> > *Subject:* [cdcbaa] New Issue****
> >
> > ****
> >
> > ****
> >
> > Something I have not come across before.
> >
> > PC has a home worth $500k. First is $200, Second is SBA loan of $300. So
> > far so good.
> >
> > SBA also has a lien on corporate inventory, a/r, fixtures etc. Those
> > assets are worth $300k, SBA lien (same debt as on the home) is $300.
> >
> > Question: If the PC files ch 7, and the trustee - postpetition - sells the
> > corp assets (forget the procedural issues related to that), and pays the
> > SBA, can he now sell the home because the equity is more than the exemption?
> > ****
> >
> > ****
> >
> >
> >
>
The post was migrated from Yahoo.
The way I see it is that your Debtor has 800k in equity and 500k in secured
debt. 800k - 500k 300k left over for the unsecured class less costs and
exemptions.
I don't see why cross collateralization would protect the Debtor in some
way (JHayes rule #1, bk does nothing). I also don't understand why in a
situation like the one above, you wouldn't do a Chapter 11, even if it is
just to liquidate assets -- as a worst case scenario. I rather have my
client get 10% seller's fee than for some trustee to sell him house AND
collect 10%? no way!
Plus, in an 11, you might be able to save the home if this person makes
enough $$.
Sincerely,
Michael Avanesian
On Mon, May 20, 2013 at 4:03 PM, Larry Simons wrote:
> **
>
>
> Actually if the IRS has a lien, the Trustee will sell and step into the
> IRSs position coming before the homestead. *See, In re Bolden, 327 BR
> 657*
>
> ** **
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Nicholas Gebelt
> *Sent:* Monday, May 20, 2013 3:49 PM
> *To:* cdcbaa@yahoogroups.com
> *Cc:* Nicholas Gebelt
> *Subject:* RE: [cdcbaa] New Issue****
>
> ** **
>
> ****
>
> Dear John,****
>
> ****
>
> I have not come across your scenario either, but I offer the following
> observation.****
>
> ****
>
> Suppose the house is worth $500,000, with a first mortgage of $200,000, a
> second mortgage of $50,000, and an IRS tax lien of $250,000. At first
> blush it looks like the trustee is out of luck. However, if the trustee
> gets the forces of Darth Vader oops, I mean the IRS to release the
> lien, there is suddenly $250,000 worth of equity, and some of it is
> nonexemptible. How can the trustee get the Dark Lord to release the lien?
> By promising a much faster payout after the sale than having to wait for
> the debtor to make payments. And depending on the facts, the remaining
> unpaid taxes may survive the discharge. ****
>
> ****
>
> If the trustee sells the corporations assets to pay off the SBA loan, it
> is analogous to getting the IRS to release the lien with the promise of a
> faster payout than waiting for the debtor pay the debt off. The house will
> still be part of the estate until the case is closed, so the trustee will
> certainly go after it once the SBA loan is paid off and the SBA lien is
> released.****
>
> ****
>
> In sum, if the trustee sells the corporate assets and pays off the SBA
> loan, the house is in jeopardy.****
>
> ****
>
> Let us know how things go.****
>
> ****
>
> Nick****
>
> ****
>
> ****
>
> Nicholas Gebelt, Ph.D., J.D.****
>
> Board Certified Bankruptcy Specialist****
>
> ****
>
> [image: Description: cid:image003.jpg@01CC076B.B14D73C0]****
>
> ****
>
> Law Offices of Nicholas Gebelt****
>
> 15150 Hornell Street****
>
> Whittier, CA 90604****
>
> Phone: 562.777.9159****
>
> FAX: 562.946.1365****
>
> Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com****
>
> Web: www.goodbye2debt.com****
>
> Blog: www.southerncaliforniabankruptcylawblog.com/****
>
> ****
>
> *We are a debt relief agency. We help people file for bankruptcy relief
> under the Bankruptcy Code.*****
>
> ****
>
> *Confidentiality Note*: This e-mail is intended only for the person or
> entity to which it is addressed and may contain information that is
> privileged, confidential, or otherwise protected from disclosure.
> Dissemination, distribution, or copying of this e-mail or the information
> herein by anyone other than the intended recipient, or an employee or agent
> responsible for delivering the message to the intended recipient, is
> prohibited. If you have received this e-mail in error, please notify us
> immediately at 562.777.9159 or e-mail info@gebeltlaw.com and destroy the
> original message and all copies.****
>
> ****
>
> *Representation Note*: If you have not signed a contract of
> representation, the Law Offices of Nicholas Gebelt do not represent you,
> and this email does not contain any legal advice for you.****
>
> ****
>
> *IRS Circular 230 Disclosure: *In order to comply with the requirements
> imposed by the Internal Revenue Service, we inform you that any U.S. tax
> advice contained in this communication (including any attachments) is not
> intended to be used, and cannot be used, for the purpose of (i) avoiding
> penalties under the Internal Revenue code, or (ii) promoting, marketing, or
> recommending to another party any transaction or matter addressed herein.*
> ***
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *jonhayes6666
> *Sent:* Monday, May 20, 2013 3:09 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* [cdcbaa] New Issue****
>
> ****
>
> ****
>
> Something I have not come across before.
>
> PC has a home worth $500k. First is $200, Second is SBA loan of $300. So
> far so good.
>
> SBA also has a lien on corporate inventory, a/r, fixtures etc. Those
> assets are worth $300k, SBA lien (same debt as on the home) is $300.
>
> Question: If the PC files ch 7, and the trustee - postpetition - sells the
> corp assets (forget the procedural issues related to that), and pays the
> SBA, can he now sell the home because the equity is more than the exemption?
> ****
>
> ****
>
>
>
The way I see it is that your Debtor has 800k in equity and 500k in secured debt. 800k - 500k 300k left over for the unsecured class less costs and exemptions. I don't see why cross collateralization would protect the Debtor in some way (JHayes rule #1, bk does nothing). I also don't understand why in a situation like the one above, you wouldn't do a Chapter 11, even if it is just to liquidate assets -- as a worst case scenario. I rather have my client get 10% seller's fee than for some trustee to sell him house AND collect 10%? no way!
Plus, in an 11, you might be able to save the home if this person makes enough $$. Sincerely, Michael Avanesian
On Mon, May 20, 2013 at 4:03 PM, Larry Simons <
The post was migrated from Yahoo.
Dear John,
I have not come across your scenario either, but I offer the following observation.
Suppose the house is worth $500,000, with a first mortgage of $200,000, a second mortgage of $50,000, and an IRS tax lien of $250,000. At first blush it looks like the trustee is out of luck. However, if the trustee gets the forces of Darth Vader - oops, I mean the IRS - to release the lien, there is suddenly $250,000 worth of equity, and some of it is nonexemptible. How can the trustee get the Dark Lord to release the lien? By promising a much faster payout after the sale than having to wait for the debtor to make payments. And depending on the facts, the remaining unpaid taxes may survive the discharge.
If the trustee sells the corporation's assets to pay off the SBA loan, it is analogous to getting the IRS to release the lien with the promise of a faster payout than waiting for the debtor pay the debt off. The house will still be part of the estate until the case is closed, so the trustee will certainly go after it once the SBA loan is paid off and the SBA lien is released.
In sum, if the trustee sells the corporate assets and pays off the SBA loan, the house is in jeopardy.
Let us know how things go.
Nick
Nicholas Gebelt, Ph.D., J.D.
Board Certified Bankruptcy Specialist
[Description: cid:image003.jpg@01CC076B.B14D73C0]
Law Offices of Nicholas Gebelt
15150 Hornell Street
Whittier, CA 90604
Phone: 562.777.9159
FAX: 562.946.1365
Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com
Web: www.goodbye2debt.com
Blog: www.southerncaliforniabankruptcylawblog.com/
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Confidentiality Note: This e-mail is intended only for the person or entity to which it is addressed and may contain information that is privileged, confidential, or otherwise protected from disclosure. Dissemination, distribution, or copying of this e-mail or the information herein by anyone other than the intended recipient, or an employee or agent responsible for delivering the message to the intended recipient, is prohibited. If you have received this e-mail in error, please notify us immediately at 562.777.9159 or e-mail info@gebeltlaw.com and destroy the original message and all copies.
Representation Note: If you have not signed a contract of representation, the Law Offices of Nicholas Gebelt do not represent you, and this email does not contain any legal advice for you.
IRS Circular 230 Disclosure: In order to comply with the requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
The post was migrated from Yahoo.
The question seems to be thus:
SBA has a loan that is cross-collateralized by both a debtor's corporate
asset and the debtor's home. What would be available to creditors under a
chapter 7 liquidation analysis?
I believe you would have to put all the assets on one side and all the
liabilities on the other side. As a result you would have the value of the
home and the value of the business in the asset column. The SBA loan would
only be listed once in the liabilities column (not twice because it is
cross-collateralized).
I believe the trustee would sell either the corporate assets or the home
with a 363(f) motion, pay the SBA, and then use the remaining unencumbered
non-exempt property to pay unsecured creditors.
I don't have a specific case to point to, or personal experience in this,
so this is just my best analysis. Hope it is helpful.
*Link Schrader, Attorney*
Law Office of Link W. Schrader
Mail: P.O. Box 3723, Tustin, CA 92781
Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701
Office: (714) 542-5922; Mobile/Text: (310) 413-6924
San Diego: (619) 952-8342; Fax: (310) 878-4158
www.schrader-law.com
The post was migrated from Yahoo.
The trustee will do what is best for the creditors. So I would say "Yes"
Good Luck starts with a strategy and a plan. The time is now to lower 2013taxes.
Robert J. Suhajda, MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA 90701
562-924-8922
Tax Relief Lawyer. Former financial auditor and controller. Admitted to USTax Court, Income Tax, IRS representation, Fiduciary income tax returns,
Estate and Gift tax returns,
In a message dated 5/20/2013 3:09:12 P.M. Pacific Daylight Time,
jhayes@hayesbklaw.com writes:
Something I have not come across before.
PC has a home worth $500k. First is $200, Second is SBA loan of $300. So
far so good.
SBA also has a lien on corporate inventory, a/r, fixtures etc. Those
assets are worth $300k, SBA lien (same debt as on the home) is $300.
Question: If the PC files ch 7, and the trustee - postpetition - sells thecorp assets (forget the procedural issues related to that), and pays the
SBA, can he now sell the home because the equity is more than the exemption?
The trustee will do what is best for the creditors. So I would say
"Yes"
Good Luck starts with a strategy and a plan. The time is
now to lower 2013 taxes.
Robert J. Suhajda,
MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA
90701
562-924-8922
Tax Relief Lawyer. Former financial auditor and
controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary
income tax returns, Estate and Gift tax returns,
In a message dated 5/20/2013 3:09:12 P.M. Pacific Daylight Time,
jhayes@hayesbklaw.com writes:
Something I have not come across before.PC has a home worth $500k.
First is $200, Second is SBA loan of $300. So far so good.SBA also has
a lien on corporate inventory, a/r, fixtures etc. Those assets are worth $300k, SBA lien (same debt as on the home) is $300. Question: If the
PC files ch 7, and the trustee - postpetition - sells the corp assets (forget
the procedural issues related to that), and pays the SBA, can he now sell the
home because the equity is more than the exemption?
The post was migrated from Yahoo.
Something I have not come across before.
PC has a home worth $500k. First is $200, Second is SBA loan of $300. So far so good.
SBA also has a lien on corporate inventory, a/r, fixtures etc. Those assets are worth $300k, SBA lien (same debt as on the home) is $300.
Question: If the PC files ch 7, and the trustee - postpetition - sells the corp assets (forget the procedural issues related to that), and pays the SBA, can he now sell the home because the equity is more than the exemption?
The post was migrated from Yahoo.